Court overturns Czestochowa insolvency following Liberty appeal
The Czestochowa regional court has repealed its decision to start bankruptcy proceedings against Liberty Czestochowa following an appeal by Liberty, Kallanish notes.
The court declared the Polish plate maker insolvent in July following a protracted production stoppage in 2023-24 and a working capital shortage. Its appointed administrator subsequently launched a tender to lease the plant, with five companies reported to be in the running, including Metinvest and Weglokoks.
Liberty appealed, claiming the business demonstrated strong support from its largest creditor and was already undergoing a “robust” restructuring and restart process.
Liberty Steel Europe chief executive Thomas Gangl says: “This is a positive result and means we can continue to move towards a sustainable future for Liberty Czestochowa. We believe the business is well positioned to support Poland’s fast-growing defence and sustainable energy sectors with its green steel plate. Our restructuring plan will be the best route to secure sustainable employment and production at Czestochowa and the repayment of all of its creditors.”
Liberty Czestochowa has a 700,000 tonnes/year EAF and 1.2 million t/y heavy plate capacity.
It is one Liberty plant struggling to survive in Central and Eastern Europe, along with Liberty’s Czech steelworks in Ostrava – also up for sale – and its Dunaújváros mill in Hungary. Production at both units has been idled for some time. However, the Hungarian plant recently received China Export and Credit Insurance Corporation funding for its transformation to EAF steelmaking.
Adam Smith Poland
Celsa rejects bids for Polish plant: sources
Polish steelmaker Celsa Huta Ostrowiec has received acquisition bids from at least two southern European long steel producers, but both were below the valuation of its Spanish parent company, multiple sources tell Kallanish.
Celsa has been looking to divest a number of its European operations, including in Poland and the UK, to raise cash to alleviate financial problems. Sources indicate the group has set a sales price target of €800 million ($890m) for its Polish electric arc furnace-based steelworks that produces around 1 million tonnes/year of rebar, beams and merchant bar.
The operation has good prospects considering Poland is expected to receive and utilise new EU funds from 2025, which will be put towards construction projects that are expected to increase steel demand.
Representatives from one other European steelmaking company are meanwhile visiting Celsa’s 1.2m t/y EAF-based UK plant in Cardiff this week, for which the group is seeking €200m, sources reveal.
Celsa could not be reached for comment.
Celsa’s is not the only Polish plant up for sale. Plate maker Huta Czestochowa, owned by Liberty, is looking for a new owner after being declared insolvent, with at least five potential suitors in the running.
Adam Smith Poland
Metinvest confirms interest in Polish plate mill
Metinvest is among the parties interested in acquiring insolvent Polish plate maker Liberty Huta Czestochowa, says the Ukrainian steelmaker’s commercial director, Dmitriy Nikolayenko.
Huta Czestochowa was declared insolvent by the Czestochowa regional court and appointed an administrator last month after hitting financial difficulties amid challenging European market conditions, including high import penetration.
The firm’s administrator, Adrian Dzwonek, has since been looking to rapidly secure a firm to lease the plant in order to restart production, with that firm then later potentially acquiring the works in full. The same model was used in 2019/20 when Huta Czestochowa was last separated from its previous owner, ISD, and eventually acquired by Liberty. Metinvest was also said to be interested in Huta Czestochowa back then.
“We can confirm that we have been invited to consider leasing the steelworks’ assets, with the possibility of acquiring them later,” Nikolayenko says in a note seen by Kallanish. “At this time, we do not yet know in what state the previous owner left the plant. We have to conduct a thorough assessment, including a comprehensive due diligence study, which would determine the date of the steelworks’ launch.”
Were the Ukrainian firm to acquire the Polish plate mill, it would plan for its long-term development, serving all available markets including Ukraine and the EU. Ukraine will need significant steel for its post-war reconstruction, providing a strong potential market for Czestochowa’s products. Metinvest could also supply the plate mill with feedstock given its proximity to and existing rail connection with Ukraine.
According to media reports, Sunningwell International, which leased Czestochowa in 2019 but missed out on acquiring it, is also in the running this time and is conducting due diligence. The firm is however this time acting on behalf of a special purpose vehicle created by a large unnamed North American steel investor. Sunningwell did not respond to request for comment before deadline.
Another potential suitor is Polish state-owned coal exporter and steel fabricator Weglokoks. The firm’s chief executive, Tomasz Slezak, made no secret of its interest at an industry event attended by Kallanish in May when he said Weglokoks would consider acquiring Czestochowa if the opportunity arose.
Liberty Czestochowa has a 700,000 tonnes/year EAF and 1.2 million t/y heavy plate capacity.
Adam Smith Poland
Liberty’s Ostrava sale garners mostly local interest
The sale of Liberty Steel’s Czech Ostrava iron and steel works has garnered interest from a number of parties, mostly local but including Indian company Jindal Steel, a delegation from which showed up at the mill in May, industry sources said June 18.
Other potential buyers included Trinecke Zelezarny, another major steel producer in the Czech Republic with a capacity of 2.5 million-2.6 million mt/year, Czech industrial holding CE Industries (CEI) known in the steel industry for having provided Czech third-largest steel producer Vitkovice Steel with tolling financing, and Czech energy company Sev.en Group, the sources said.
Liberty Steel declined to discuss the sales process and the above-named entities were not available for comment.
Given the ongoing risks and uncertainties, Liberty Steel last week announced a sale of Ostrava and its judicial reorganization under the Insolvency Act.
It had worked on several restructuring plans for Ostrava, including a mid- to long-term transition to electric arc furnace technology.
In April, Sanjeev Gupta, head of GFG Alliance, an umbrella group which Liberty Steel is part of, met Czech finance and industry ministers but the latter found the plans “weak” and “unconvincing” with no breakthrough achieved on the mill’s restart, sources said.
Steel production at Ostrava was halted in the fourth quarter of 2023 when Liberty Steel in October idled blast furnace No. 3, the last remaining operational BF at its Ostrava steelworks, citing poor demand in Europe as the main reason.
Some downstream mills continued rolling, using up previously acquired semi-finished steel stock. Ostrava’s blast furnace No. 2 was idled in July 2022 for repairs and an upgrade but has never been restarted.
Ostrava’s restructuring was hampered by external factors, primarily a further deterioration of market conditions in Europe, an indefinite delay in the allocation of emissions allowances to the business from Czech authorities, Liberty Steel said, adding Ostrava was filing for a judicial reorganization which will provide the time and protection to undertake its sale.
The sale decision was in the best interests of Ostrava’s creditors, employees and customers, said Liberty, which intends to maintain the few assets which cover their own costs and support employees in applying for the state’s Wage Guarantee Scheme.
The Ostrava plant is the Czech Republic’s biggest steel producer capable of making up to 2 million mt/year at full steam. Liberty Steel acquired it from ArcelorMittal in July 2019. After years of underinvestment, it says it injected Eur143 million ($153 million) in the plant and led to its best performance in a few years in 2021-22.
In 2021, Ostrava produced a five-year high of liquid steel at 2.28 million mt with the plant’s two blast furnaces producing 1.93 million mt of hot metal during the year, but last year, its steel production declined to 1 million mt, according to local media reports.
Katya Bouckley
